JOHANNESBURG, (CAJ News) – THE recent imposition of a hefty fine on MTN by the Nigeria Communications Commission (NCC) might be linked to plans by government to find alternative revenue sources amid plummeting oil prices.
This is according to a consultant with the South African-based security think-tank following the visit to Nigeria by International Monetary Fund (IMF) Managing Director, Christine Lagarde.
“Lagarde also offered what was in large part a counsel of perfection; that Nigeria should find other sources of revenue to mitigate the huge loss of income caused by the falling price of oil, upon which the government depends for more than half its budget,” said Peter Fabricius, consultant at the Institute for Security Studies (ISS).
He pointed out Buhari, who was elected last March on a ticket to put Nigeria’s chaotic finances in order, had announced ambitious plans to do so, including a major clamp-down on the country’s notorious corruption and by plugging other financial leaks.
“That could explain the Nigerian telecommunications regulator’s decision to fine South African mobile telephone company MTN an astonishing US$5,2 billion (later reduced on appeal to US$3,9 billion) for failing to disconnect five million unregistered SIM cards last year,” said Fabricius.
He noted a prominent journal had suggested this fine should be seen against the background of MTN allegedly transferring US$400 million a year in transfer fees from its Nigerian subsidiary to a tax-free entity in Mauritius.
“Whether Nigeria will be able to make up for the loss of oil revenue with just these monetary and fiscal measures is doubtful, though, without a major diversification of the economy away from oil. The IMF has offered help Nigeria diversify,” Fabricius said.
Late last year, NCC fined MTN the landmark penalty for defying the regulator’s orders to disconnect unregistered subscribers.
MTN is challenging the penalty in court.
– CAJ News